scholarly journals Determinants of Micro and Small Scale Enterprises’ financing preference in line with POH and Access to Credit: Empirical Evidence from Entrepreneurs in Ethiopia, Benishangul-Gumuz Regional State

2020 ◽  
Author(s):  
Hayelom Abrha Meressa
Keyword(s):  
Logistic Regression ◽  
Educational Background ◽  
Primary Data ◽  
Small Scale ◽  
Pecking Order ◽  
Access To Credit ◽  
Regional State ◽  
Financing Preference ◽  
Business Experience ◽  
Pecking Order Hypothesis

Abstract The purpose of this study was to examine factors that determine micro and small scale enterprises’ financing preference in line with pecking order theory and access to credit in Benishangul-Gumuz Regional State of Ethiopia. The study used primary data collected using cross sectional survey questionnaire. The sample of this study was 296 enterprises selected using proportional stratified random sampling technique. The data was analyzed using descriptive and logistic regression analysis. Accordingly, the results of logistic regression revealed that business experience, collateral, gender, motivation and enterprises’ sectoral engagement affect financing preference of enterprises in line with pecking order hypothesis. To investigate access to credit determinants, only enterprises that need to raise capital through credit were considered. As a result, the logistic regression output revealed that business experience, size, sectoral engagement, collateral, interest rate, loan repayment period, financial reporting, preparation of business plan, location and educational background of entrepreneurs affect access to credit of enterprises. However, more evidence is needed on enterprises’ financing preference and access to credit determinants before any generalization of the results can be made for the fact that the empirical tests were conducted only on 296 entrepreneurs since 2019. Therefore, the findings are valid and practicable only for the entrepreneurs under the study and the results cannot be assumed to extend beyond this group of entrepreneurs to different study periods. Despite its limitations, the study makes an original contribution to the literature of small business finance by investigating determinants of micro and small scale enterprises’ financing preference in line with pecking order hypothesis and access to credit in Benishangul Gumuz regional state of Ethiopia as a developing country.

scholarly journals Determinants of Micro and Small Scale Enterprises’ financing preference in line with POH and Access to Credit: Empirical Evidence from Entrepreneurs in Ethiopia, Benishangul-Gumuz Regional State

2020 ◽  
Author(s):  
Hayelom Abrha Meressa
Keyword(s):  
Logistic Regression ◽  
Regression Analysis ◽  
Logistic Regression Analysis ◽  
Small Scale ◽  
Pecking Order ◽  
Access To Credit ◽  
Regional State ◽  
Financing Preference ◽  
Business Experience ◽  
Pecking Order Hypothesis

Abstract Purpose: The purpose of this study was to examine factors that determine micro and small scale enterprises’ financing preference in line with pecking order theory and access to credit in Benishangul-Gumuz Regional State of Ethiopia.Design / Methodology / Approach: The study used primary data collected using cross sectional survey questionnaire followed by mixed research approach. The sample of this study was 296 enterprises selected using proportional stratified random sampling technique. The data was analyzed using descriptive and logistic regression analysis.Findings: The results of logistic regression analysis revealed that business experience, collateral, gender, motivation and enterprises’ sectoral engagement affect financing preference of enterprises in line with pecking order hypothesis. On the second step, only enterprises that need to raise capital through credit were considered to investigate access to credit determinants. Accordingly, the logistic regression result revealed that business experience, size, sectoral engagement, collateral, interest rate, loan repayment period, financial reporting, preparation of business plan, location and educational background of entrepreneurs affect access to credit of enterprises. Research limitations/Implications: More evidence is needed on enterprises’ financing preference and access to credit determinants before any generalization of the results can be made. In addition, the empirical tests were conducted only on 296 entrepreneurs since 2019. Therefore, the results of the study cannot be assumed to extend beyond this group of entrepreneurs to different study periods.Originality/value: This paper adds value to the literature on the determinants of micro and small scale enterprises’ financing preference in line with pecking order hypothesis and access to credit.

Financing preferences of micro and small enterprise owners in Tigray: does POH hold?

2009 ◽  
Vol 16 (2) ◽  
pp. 322-334 ◽  
Author(s):  
Gebregziabher Haileselasie Gebru
Keyword(s):  
Small Enterprise ◽  
Small Enterprises ◽  
Pecking Order ◽  
Ownership Type ◽  
Content Type ◽  
Financing Decisions ◽  
Entrepreneurial Skills ◽  
Regional State ◽  
Micro And Small Enterprises ◽  
Pecking Order Hypothesis

PurposeThis paper aims to investigate the determinants of financing preferences of micro and small enterprises (MSEs) owners in Tigray regional state of Ethiopia in light of the Pecking Order Hypothesis (POH).Design/methodology/approachStructured questionnaires were used to collect data from 120 MSEs in six zonal towns of Tigray regional state. Logistic regression model was used to empirically test the literature‐driven hypotheses.FindingsKey findings include that POH holds true for MSE owners in Tigray regional state as the educational level of owners decreases and there is less intrusion in the form of ownership. On the other hand, MSE owners with a higher degree of entrepreneurial skills are found to conform with the predictions of POH. Furthermore, factors such as ownership type, acquisition type, level of education of the owner/s and reason for business startups are found to be major determinants of MSE owners' financing preferences.Research limitations/implicationsThere are of course elements that could determine MSE owners' financing preferences that require better understanding before a reliable prescriptive position on SME financing can be reached. At the same time, in this paper, data were collected from one regional state of Ethiopia that limits the generalization power of the conclusions reached. A need for more in‐depth qualitative investigation is further pointed out.Originality/valueThe research shows significance of ownership structure, entrepreneurability and MSE owners' education level in financing decisions of MSEs. The paper empirically tests POH in MSEs in Tigray regional state of Ethiopia.

scholarly journals Fertilizer use among cocoa farmers in Ghana: the case of Sefwi Wiawso District

2014 ◽  
Vol 3 (1) ◽  
pp. 22-31 ◽  
Author(s):  
Isaac Nunoo ◽  
Benedicta Nsiah Frimpong ◽  
Frederick Kwabena Frimpong
Keyword(s):  
Adult Literacy ◽  
Least Square ◽  
Farm Size ◽  
Primary Data ◽  
Small Scale ◽  
Western Region ◽  
Fertilizer Use ◽  
Access To Credit ◽  
The Western Region ◽  
Cocoa Farmers

This study analyses factors that influence fertilizer use among cocoa farmers in the Sefwi Wiawso District in the Western Region, Ghana. Primary data were obtained from 200 cocoa farmers in the district. Descriptive statistics and ordinary least square regression analysis were used to analyse data collected. The results revealed that majority of the cocoa farmers were males and are getting old. Also farm size and price of fertilizer were significant factors affecting fertilizer use among cocoa farmers in the Sefwi Wiawso District in the Western Region. Moreover 74.5 percent farmers do not use fertilizer whereas 25.5 percent use fertilizer on their cocoa farms. The study recommends that Ghana government should further subsidise the price of fertilizer to make fertilizer more affordable to small holder cocoa farmers and also adopt strategies that hedge against price risk. In addition, illiterate farmers should be encouraged to undergo adult literacy programmes. Rural development policies should think about the importance of improving small-scale farmers? access to credit market. Furthermore, the extension unit of the Ghana Cocoa board and Ministry of Agriculture should be strengthened to educate cocoa farmers more on fertilizer usage. DOI: http://dx.doi.org/10.3126/ije.v3i1.9939 International Journal of Environment Vol.3(1) 2014: 22-31

scholarly journals Farmers income and savings pattern in Benue State, Nigeria

2020 ◽  
Vol 24 (1) ◽  
pp. 128-137
Author(s):  
Ngozi Ekunyi Odoh ◽  
Simon Uguru Nwibo ◽  
Anayochukwu Victor Eze ◽  
Esther Onyinyichi Igwe
Keyword(s):  
Crop Production ◽  
Forest Products ◽  
Positive Influence ◽  
Farm Size ◽  
Primary Data ◽  
Small Scale ◽  
Formal Sector ◽  
Access To Credit ◽  
Small Scale Farmers ◽  
Sampling Procedures

The study analysed farmers’ income and savings pattern in Benue State. Both multi-stage random and purposive sampling procedures were employed to select 140 respondents for the study. The study employed primary data which were collected through the use of the structured questionnaire. The result showed that farm size, level of access to credit, diversification of income sources, types of investment and risks inherent in the business are the major determinants of the income level of the small scale farmers. The farmers engaged in the following farm activities, crop production, hunting, fishing, gathering of forest products, marketing of agricultural products and livestock production. Meanwhile, trading, teaching, and non-farm wage labour were the main non-farm activities they engaged in. The result equally showed that farmers adopted both formal and informal savings methods but have higher preference for the informal method as indicated by their preference for savings in rotational savings and credit Association (ESUSU) and daily contribution schemes. Educational attainment, annual income, farming experience, and farm size had positive influence on the farmers’ savings pattern. The test of the hypothesis indicated that the socio-economic characteristics of the small scale farmers have significant effects on the savings pattern adopted in the area. Consequently, the study recommended the establishment of banks in the rural area so as to increase farmers’ savings capacity in formal sector; establishment of enlightenment programme to create awareness among the rural farmers, and introduction of risk reduction policy to minimize risks associated with farming, thereby encouraging farmers to remain in farming business.Keywords: Farm activities, non-farm activities, farmers, formal and informal savings

scholarly journals Shifting from rice production to shrimp culture in coastal zones of Khulna: Determination of the determinants

2016 ◽  
Vol 13 (2) ◽  
pp. 257-264 ◽  
Author(s):  
M Anisuzzaman ◽  
MA Islam ◽  
KMM Rahman ◽  
MSR Shetu
Keyword(s):  
Logistic Regression ◽  
Saline Water ◽  
Binary Logistic Regression ◽  
Rice Cultivation ◽  
Primary Data ◽  
Bivariate Analysis ◽  
Coastal Zones ◽  
Shrimp Culture ◽  
Access To Credit ◽  
Land Holdings

This study aimed to investigate the determinants of shifting to shrimp culture from rice cultivation in coastal zones of Khulna district by using primary data collected from the four upazillas of Khulna, namely, Batiaghata, Dacope, Dumuria, and Paikgacha. Along with bivariate analysis, single-level binary logistic regression was carried out to identify the determinants of shifting. Through the bivariate analysis it had found that among all variables considered, some variables, precisely, amount of land holdings, access to credit, contact with GOs/NGOs, intrusion of saline water, perception of profitability of shrimp, and water logging had significant relation with shifting to shrimp culture. Similarly, the binary logistic regression had identified five significant determinants of shifting from rice cultivation to shrimp culture: occupation, land holding, access to credit, intrusion of saline water, and water logging.J. Bangladesh Agril. Univ. 13(2): 257-264, December 2015

scholarly journals Assessment of Intervention Strategies for Addressing Agricultural Production Shocks in Tanzania: The Case of Rufiji, Mbarali and Sumbawanga Districts

2019 ◽  
Vol 12 (6) ◽  
pp. 1
Author(s):  
Peter Samwel ◽  
Elliott P. Niboye
Keyword(s):  
Agricultural Production ◽  
Smallholder Farmers ◽  
Information Access ◽  
Intervention Strategies ◽  
Local Context ◽  
Primary Data ◽  
Small Scale ◽  
Local Policy ◽  
Access To Credit ◽  
Irrigation Technologies

This study sought to gain in-depth understanding into smallholder farmers’ perceptions of intervention strategies for addressing agricultural production shocks in Tanzania. It involved identification of local policy and intervention strategies that can be used to address agricultural production shocks and build resilience among smallholder farmers in Tanzania. The study employed mixed research methodology, using primary data collected from six villages in Sumbawanga, Mbarali and Rufiji districts in Tanzania. Overall findings reveal that smallholder farmers have good knowledge of possible strategies for addressing agricultural production shocks. The farmers recommended local policy and intervention strategies for supporting them such as facilitation of access to credit and subsidies, reinforcing and strengthening informal social networks, supporting income diversification activities and introduction of crop insurance system. Other intervention strategies include introduction of participatory village land use plans, promoting information access and training to smallholder farmers and enhancing access to small-scale irrigation technologies. Based on these findings, the study recommends that policy makers and researchers should concentrate on understanding farmers’ perceptions in view of using local knowledge in the design and implementation of intervention strategies. The strength of farmers’ perceptions is that it is the outcome of farmers’ actual experience, and it is based on understanding of the local context. .The paper concludes that unless the strategies are fully implemented, agricultural production shocks will continue to affect smallholder farmers in rural Tanzania.

scholarly journals Performance of SMEs: A Special Focus on Small Size Businesses (SSBs) Determinants of Growth at the Tangail Using Logistic Regression

2020 ◽  
pp. 49-61
Author(s):  
Joynab Joynab ◽  
Roksana Akhter
Keyword(s):  
Logistic Regression ◽  
Poverty Reduction ◽  
Low Cost ◽  
Primary Data ◽  
Small Scale ◽  
Special Focus ◽  
Dominant Position ◽  
Asset Growth ◽  
Employment Generation ◽  
Very High

Small scale enterprises (SMEs) take possession of dominant position in any developing countries like Bangladesh. Small scale enterprises (SMEs) specially focused on the study of Small scale business (SSBs) at tangail which is significant contribution of countries economy where density of population is very high because it offers large number of employment generation opportunities and income generation at low cost which is reduction poverty. Considering the importance this study has strived to identify those were collecting primary data which is statistically significant. First using educational level of entrepreneur’s, loan facilities,’ sector of loan collecting, employment generation and poverty reduction analyze frequency of statistics and later using logistic regression determinant of gross profits, asset growth at tangail district. The study shows that entrepreneurs of SSBs 82% influences of profit rising by educational levels and ownership of business is 58% and 72% profits rising when loan facilities of SSBs.

scholarly journals Factors Determining the Credit Accessibility by the Small-Scale Entrepreneurs: A Case of Handloom Weaving in Bangladesh

2020 ◽  
Vol 15 (8) ◽  
pp. 93
Author(s):  
Mst Tania Parvin ◽  
Kanij Fatema ◽  
Sadika Haque
Keyword(s):  
Financial Services ◽  
Work Experience ◽  
Sampling Technique ◽  
Farm Size ◽  
Primary Data ◽  
Small Scale ◽  
Microfinance Institutions ◽  
Institutional Perspective ◽  
Credit Access ◽  
Access To Credit

This study examines the determinants of access to credit by the handloom weavers in Bangladesh. Using the multistage sampling technique, the primary data for the analysis were collected from 311 randomly selected handloom weavers from Sirajganj district of Bangladesh during July to December 2015. The data are analyzed by using the Logit model. The model identifies several individual, household, community, and institution-specific factors as the significant determinants of credit access. Among them, family size, farm size, work experience, saving and the flexibility in the terms and conditions of loan use increase the probability of credit access by the handloom weavers whereas the risk aversion attitude and the distance between the Microfinance Institutions (MFIs) from the commune reduce such possibility. Therefore, this study suggests that respondents should utilize the joint effort of the available family members in this labor-intensive business while undertaking rational decisions enhanced through the skills and capabilities acquired over the years. They should maintain a sufficient amount of saving to prove them eligible in repaying their credit. From the institutional perspective, it is suggested that the MFIs should provide adequate financial and non-financial services to its clientele as per their needs. Borrowers’ easy accessibility to the institutions should also be ensured. In doing so, they should open up more branches in the villages so that the door to door services are available to the borrowers. It is expected that these recommendations will help in improving the credit access by the handloom weavers in Bangladesh.

scholarly journals Analysis of technical efficiency of smallholder tomato producers in Asaita district, Afar National Regional State, Ethiopia

PLoS ONE ◽  
2021 ◽  
Vol 16 (9) ◽  
pp. e0257366
Author(s):  
Dagmawe Menelek Asfaw
Keyword(s):  
Technical Efficiency ◽  
Statistical Significance ◽  
Stochastic Frontier ◽  
Maximum Likelihood Estimates ◽  
Primary Data ◽  
Farm Income ◽  
Stochastic Frontier Model ◽  
Related Factors ◽  
Access To Credit ◽  
Regional State

The tomato had nutritional, economic and health benefits to the societies, however, its production and productivity were low in developing countries and particularly in Ethiopia. This might be due to technical inefficiency caused by institutional, governmental, and farmers related factors. Therefore this study tried to investigate the factors that affecting technical efficiency and estimating the mean level of technical efficiency of tomato producers in Asaita district, Afar Regional State, Ethiopia. Both primary and secondary data sources were used; the primary data was collected from 267 tomato producers from the study area cross-sectional by using a multistage sampling technique. The single-stage stochastic frontier model and Cobb Douglas production function were applied and statistical significance was declared at 0.05. The maximum likelihood estimates of the stochastic frontier model showed that land, labor, tomato seed, and oxen have a significant effect on tomato output; and education, extension contact, training, and access to credit have a positive and significant effect on technical efficiency, whereas household size, off-farm income, livestock ownership, distance to market, and pesticides have a worthy and significant effect on technical efficiency; and also estimated mean technical efficiency of tomato producer in a study area was 80.9%. In a line with this, the responsible body should prioritize rural infrastructure development in areas such as education, marketplace, and farmer training centers; demonstrate access to credit and extension services; use the recommended amount of pesticides per hectare, and give more intension to mixed farming rather than animal husbandry exclusively.

Sign in / Sign up

Export Citation Format

Share Document